Which of the following is true of pro forma financial statements?
A) Pro forma statements purport to show what the combined firms would look adjusted for synergy and the terms of the deal
B) Pro forma statements are the same as GAAP statements
C) Pro forma statements show what the combined firms would look excluding the effects of synergy
D) a and b only
E) None of the above

Question

Quizplus · Accepted Answer

Pro forma financial statements are designed to show the financial results of companies as if certain transactions (such as mergers and acquisitions) had occurred, including adjustments for synergies and the terms of the deal, making option A correct. They are not the same as GAAP statements, as they often make adjustments that GAAP statements do not, such as excluding certain costs or hypothetical scenarios.

Which of the Following Is True of Pro Forma Financial